LLF has developed LED lighting retrofit products that use the company's patented color-mixing technology, which produces both very high efficiency and color quality. Details of this technology are explained in an article in the Jan/Feb 2008 issue of LEDs Magazine. The downlight products use Cree Xlamp LEDs.
As well as high-performance downlights that are in production, LLF has reported some excellent R&D results – see for example LLF reports 113.6 lm/W from warm-white PAR 38 LED lamp.
Neal Hunter, chairman and CEO of LLF, was a co-founder and chairman of Cree. Hunter will rejoin Cree as president of Cree LED Lighting Solutions, as LLF will be known. The remainder of the LLF management team will continue in their roles within the organization.
The deal provides Cree with vertical integration from silicon carbide substrates and LED chips through to packaged LEDs (including power XLamp devices as well as LEDs manufactured by Cotco) and, now, to LED fixtures.
Cree said in a press release that the acquisition will "expand Cree's market opportunity by providing direct access to the lighting market", although the amount of access provided by a small and new company such as LLF is to be questioned.
The acquisition also puts Cree into competition with some of its LED customers, although this is not unusual situation to have to deal with. Rival LED makers Osram Opto Semiconductors and Philips Lumileds sit within organizations that also produce LED lighting modules and fixtures.
Cree also stated that the deal "will enable Cree to drive retrofit solutions to convert existing lighting infrastructure to energy-efficient lighting and to accelerate the adoption of LED lighting."
Chuck Swoboda, CEO of Cree, said that "The combination of Cree's lighting-class LEDs and LLF's lighting-systems technologies should set the stage for Cree to obsolete [sic] the light bulb, a 19th century invention that wastes energy and pollutes our environment. We believe the market is at a tipping point, with billions of sockets in existing fixtures now addressable with energy-efficient LED lighting. Accelerating this market transformation benefits Cree, our LED customers and lighting consumers.'
The additional consideration of up to $26.4 million is tied over the next three calendar years to new product milestones and key-employee retention. In fiscal 2009, the Company targets this acquisition to add approximately $30 million of revenue from the combination of growing LLF product sales and synergies with Cree's other LED product lines. The transaction is targeted to close in early March 2008.
"Cree is as passionate as we are about moving the lighting market forward and making an impact on energy consumption into the next decade and beyond," said Hunter. "This acquisition should make Cree a powerful force for innovation around cutting-edge LED lighting solutions that are unmatched in the industry."